Irish construction

Digital ambition driving Irish construction to international scale

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John Hunt, senior market advisor for the construction sector at Enterprise Ireland, describes how Irish construction companies are gaining competitive advantage by investing in digitisation.

For construction companies in Ireland, investment in digitisation was once hampered by uncertainty about cost and the likelihood of generating an immediate return on investment (ROI). Disruption from digital is, however, high on the international agenda. Globally, the sector is undergoing a digital transition, particularly evident with the increasing adoption of Building Information Modelling (BIM). Today, ROI is often understood by the sector to mean the potential cost of doing nothing, or the ‘Return On Inactivity’.

BIM, an innovative 3D digital process, gives construction professionals insights and tools to design, construct and manage projects more effectively. Irish companies have moved ahead of international competitors in the adoption of digital technologies, with Enterprise Ireland delivering targeted BIM capability programmes for SMEs since 2013.

A number of recent announcements further support Irish companies to compete in the evolving international marketplace, delivering an advantage at a time when there is much to gain from winning overseas opportunities.

As a major client of construction services, the government’s commitment to a four-year adoption of digital technologies across its public capital programme is an important milestone. A digital procurement directive was signed by the Minister for Public Expenditure and Reform, Paschal Donohoe TD and the Minister of State for Public Procurement, Open Government and eGovernment, Patrick O’Donovan TD.

The government announced its approval of the National BIM Council’s ‘Roadmap to Digital Transition’, the first digital strategy for the industry in Ireland, published in December. The Roadmap reports that Irish companies are aware that the adoption of international best practice positions them best for growth and do not wish to ‘reinvent the wheel’. The Roadmap’s strategy is aligned to support the needs of the SME community that makes up almost 95% of the sector in Ireland and across the European Union.

Research shows that Irish companies are well positioned to benefit from increasing demand for digitisation internationally. The third survey to benchmark levels of BIM adoption in Ireland reports that 76% of professionals are confident they possess the skills and knowledge required to deliver BIM, an increase of 9% on the 2015 figure. Research revealed a growing demand for BIM, with one company reporting, “We have hired 2 BIM modellers to work in the office and have started the process of becoming BIM enabled with a grant from Enterprise Ireland.”

The combination of increased government support and the strategy described in the Roadmap presents an opportunity for more Irish companies to become leaders in implementing common standards and guidelines to international best practice in BIM. It is essential that Irish companies use supports available to respond to demand and keep pace with international competition.

A number of designers, contractors and manufacturers lead the way in overseas markets across sectors. Scott Tallon Walker, Grafton Architects, Jones Engineering, and EPS are BIM exemplars that specialise in healthcare, education, data centre and water-related projects. Cork-based EDC were the first mechanical and electrical consultancy in the UK and Ireland to receive BIM Level 2 accreditation. As a BIM early adopter, the company capitalised on opportunities from the UK’s digital transition and developed a strong team of more than 15 employees in their London office. The progressive engineering company has delivered design work further afield. Earlier this year, EDC completed the detailed design for a $150 million commercial project in Lagos, Nigeria. Managing Director Richard O’Farrell says, “BIM enabled us to engage in a wider package of design works and a far deeper level of detailing than would have been possible before, opening up many opportunities.”

The work Enterprise Ireland has done to promote BIM to support the Construction 2020 Strategy and the recent Action Plan for Jobs 2017 has received wide industry support. These initiatives are timely and urgent, given the industry’s importance to the national economy. One in ten jobs in Ireland is employed by the construction sector. The push to digital best practice will give our companies more productive ways of working that improve competitiveness at home and overseas.

This article was originally published in the Sunday Independent.

Record food exports driven by Irish innovation

Record food exports driven by Irish innovation

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Orla Battersby, divisional manager for food at Enterprise Ireland, outlines the factors driving the rapid growth of the country’s largest indigenous sector.

The value of Irish food, drink and horticulture exports increased by 13% in 2017, to reach €12.6 billion, a new record. This stellar performance marked the eighth successive year of growth for Ireland’s largest indigenous sector.

While many factors have played a role in the achievement, chief among them is the ingenuity and innovative capacity of Irish food companies. Successful exporters in this most competitive of sectors must by their nature be innovative. They must be capable of extremely rapid responses to changes in consumer demand, while at the same time remaining capable of meeting the exacting requirements of grocery multiples in relation to price, quality, and new product development.

At its simplest, innovation in food and beverage products is the market-led development of new or improved products to meet changing customer needs. But innovation is actually much more multifaceted than that. It is about embracing a culture throughout the whole business. Innovation means taking a customer-centric approach to all aspects of the company, from who is hired through to technology and processes utilised, the packaging of products and the way they are branded and sold.

Enterprise Ireland supports food and beverage innovation in numerous ways and has assisted approximately 100 significant in-company research, development and innovation projects for clients across the sector since 2013. These projects range from new, more efficient and lower-cost manufacturing processes to product reformulation and new product development, with the aim of breaking into new customer segments and markets.

Among the innovative companies supported by Enterprise Ireland is Keohanes Seafoods of Cork. They realised that many consumers did not like the hassle of preparing and cooking fish and were the first company in Ireland to produce a microwaveable skin film range of products, which means the consumer never has to touch the product. Keohanes used a packaging technology designed for other purposes and it has basically brought fish from the fish counter to the chilled convenience aisle.

Another Cork company, Dairy Concepts, manufactures hand-held nutritious dairy snacks for children, using patented milk casein technology. The key competitive differentiator of its Fruchee product is that it contains 40pc less sugar along with higher calcium, protein and Vitamin D than competitors.

Dublin-based Nuritas, led by Dr Nora Khaldi, is developing technology that combines artificial intelligence and DNA analysis to discover the health benefits of peptides in natural foods and is a great example of a food start-up company that Enterprise Ireland has worked with at feasibility stage and is now supporting to scale.

Large companies in the dairy, beverage and meat processing sectors are also highly innovative, as their export success demonstrates. In fact, the 2017 export performance was driven by a 19% leap in dairy exports to over €4 billion, and a 5% increase in sales of Irish beef. Dairy now accounts for one-third of all food and drink exports, with beef representing one-fifth of all exports at almost €2.5 billion.

There is clear evidence to demonstrate the role innovation has played in this success. Enterprise Ireland carried out a survey in 2016 which showed that firms who availed of innovation supports from us reported an average 67% growth in global sales.

These supports take many forms. The Agile Innovation Fund gives companies support of up to 50% of eligible project expenditure up to €300,000, which is very useful for projects which must happen rapidly. The approval process is fast tracked, enabling companies to get projects delivered quickly. In addition to in-company R&D, Enterprise Ireland also supports companies in collaborative innovation projects, helping them to access the insights of researchers working across Ireland’s third-level sector, and European expertise and funding under the EU Horizon 2020 programme.

But we cannot allow ourselves to become complacent when it comes to innovation. Food companies throughout Europe and beyond are competing for the same markets, while Brexit will create new challenges for Irish companies. A continued laser-like focus on innovation will be required in order to maintain and add to our success on international markets.

This article was originally published in the Sunday Independent.

Smurfit Kappa France

Thinking outside the box: how Smurfit Kappa succeeded in France

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Opportunity comes to pass not pause – and right now it’s in France. That’s the message from Terry McGivern, Chief Operating Officer of Smurfit Kappa in France.

McGivern was speaking at Ambition France, an event recently organised by Enterprise Ireland which included a packed programme of talks, presentations and panel discussions. Ambition France featured companies already succeeding in the French market, businesses looking to do so and expert advisors who can help.

With 4,500 employees in 47 operating companies in France alone, Smurfit Kappa’s success in the market is significant. It made its first foray into France in 1990 with the acquisition of two small box plants.  Its first major deal came in 1994 with the acquisition of Cellulose du Pin, which doubled the size of the company.

France was Smurfit’s third export market at the time, after the UK and US, both of which had been chosen for the language, legal and cultural similarities. “France was down to proximity and market size,” McGivern explained.

“Our company had no specific knowledge of France. Our approach was to buy those two small paper mills and see what happens. It was very much a shot in the dark but it allowed the company to understand the market, the players, dynamics and opportunities. And without this initial investment there would not have been the will or the confidence to do the very large cellulose plant acquisition in 1994,” he said.

From 2008 to 2016 the corrugated industry saw zero growth in France, returning to growth only in 2017.

French market in a positive position

“France has come out of the downturn and is in a positive position,” McGivern said. The economic indicators are strong and the population is growing. Consumer confidence is at its highest level in over 15 years and the PMI (purchasing managers’ index) is at its highest level ever.

Those considering France must however recognise that there is not one France, but rather “a number of very different Frances,” said McGivern. These include the increasingly wealthy Atlantic region taking in Nantes, Brittany and Normandy, the traditional economic powerhouse of Northern France centred around Lille, and the Germanic influenced regions of Alsace and Moselle in the north east.

Heading south, Lyons is one of the most dynamic city in France, he said. Moving along the Mediterranean regions of Provence and the Cote d’Azur brings you to the great industry city Tolouse, centred around Airbus, and on to Bordeaux, “the most dynamic city in terms of population growth,” he said. At the centre is Paris and Ile de France.

“Each region is uniquely different and you need to be aware of those differences, their values and approaches to work. Depending on your market opportunity and where you want to set up, it’s important to tap into the local nuances of that region.”

Wherever you go, be prepared for bureaucracy. “It was created in France”, he said. “Things take longer. There is a form, a department and a process for absolutely everything. There is also a sequence of getting said form and submitting it and if you fall foul of the sequence you are right back at the start again.”

Be aware of social etiquette too. “French society is very hierarchical. This surprised me as a Republic but there are very significant differences to our own Republic,” he said, referring to the importance of what Dutch social psychologist Geert Hofstede calls “the power distance”.

“This is where Ireland and France are at the opposite ends of the spectrum,” said McGivern. “In France, people may disagree with the authority but they respect the authority. In Ireland, we like having a go at whoever is in power and bringing them down a peg if we can.”

Understand French support for unions, he advised. “French society has a very strong attachment to Les Syndicats despite the fact that only a very small proportion of the population are actually in unions.”

UK businesses can find there is “quite a stretch” to be made in terms of employee and industrial relations when they set up in France. “In Ireland, it’s not such a gap because the social partnership model we have had here over the last 20 years is very beneficial for dealing with union issues in France,” he said.

Indeed, “being Irish is a very significant advantage” in France generally, he said, quoting his former boss Dermot Smurfit. “We never invaded anyone. We have no historical baggage and so are rarely greeted with suspicion. Indeed, our cultural baggage is benevolent, associated with music and literature,” said McGivern.

Those planning on setting up operations there should bear the acronym FARM in mind:

F stands for French locals, or at the very least naturalised people. “To succeed in France you cannot have a leadership team made up of non-French people. France is a very proud nation, don’t lose sight of that.”

A is for advice. “Seek it from Enterprise Ireland and from professionals in France who can hold your hand through the bureaucracy,” he said.

R is for resilience. “At 66m people the size of the prize is very significant and growing. France is also our nearest EU neighbour from May 2019. There will be setbacks but double down and stick to your business plan.”

Finally, M is for Macron, France’s reforming new leader. “It’s not so much his policies but the confidence he is giving back to France that is of note. Channel that attitude of possibility and greatness to your own business and you stand ready to succeed in France,” he said.

“Remember, opportunity comes to pass, not pause and there is a great opportunity at this time to be trying to enter into the French market.”

For more information on doing business in France download our Going Global guide to France.

Construction Turns Tide on Ireland’s Continental Drift

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Collen Construction

Unlike most building companies, Collen Construction grew during the recession by identifying opportunities in new, technologically driven sectors such as data centres and biopharma. In 2010, the 210 year old family business built its first data centre for a multinational client. Now, with close to 2 million sq. ft of high-tech space completed, it is one of the top Irish contractors in the ‘hitech/data hall’ space.

In 2014, at the invitation of the same multinational client, Collen Construction built its first data centre in Germany, and last April, the company opened an office in Frankfurt from where it plans to pursue further opportunities throughout Europe.

The European operations manager of Collen GmbH, Thomas O’Connor, stresses the importance of having a clear focus in order be credible overseas. Collen’s reputation in Ireland for being good at a wide range of construction activities will not open doors or win business in Europe, he says.

“We’ve made data centres our sweet spot and built a reputation for knowing how to mitigate the risks involved. These types of projects impose challenging deadlines and require us to produce volumes of technical information. Since 2010, we’ve really got to know the suppliers in this specialised field, and we’re comfortable in it.”

One of the secrets for managing the risk, O’Connor reveals, is treating all the sub contractors as partners and stakeholders. “For our clients, it’s all about speed-to-market, and, in that sense, it’s a very unforgiving sector. In this type of specialised project, therefore, if one fails, we all fail. It really is that simple. So we adopted a partnership approach in 2014, and the model has not let us down.”

PM Group

Like Collen, PM Group has followed its blue chip clients into continental Europe and has been active in the Benelux region, in particular, over the past 10 years.

Colm Fitzgerald, head of construction services at the engineering, architecture and project management firm, says there are a number of “bear traps” that construction firms need to be aware of. First and foremost is the need to respect other cultures. “Even something as simple as a turn of phrase that might be commonly used in Ireland could be misinterpreted,” he warns.

There are also differences in approaches to health and safety across Europe. “On the ground investigation and research is essential to identify exactly where the bar is set. In some countries, it’s not as high as in Ireland or the UK, for example.”

Fitzgerald also puts a strong emphasis on identifying contractors compatible with the Irish company’s own way of approaching business. “We do a lot of work in the life science sectors, and our clients demand and expect world class standards. We put significant effort into the pre-construction phase of our projects in mapping out execution plans. This is key to establishing best-in-class construction quality and health and safety programmes, so that everyone involved in the project knows exactly what’s expected of them and is both willing and able to deliver. We have worked hard in establishing a solid supply chain, and this has paid dividends in terms of our successful project delivery.”

“We have tended to enter a country in stages. Typically we would begin with concept design work, then expand our services from there.”

Colm Fitzgerald, head of construction services, PM Group.

Up until now, PM Group’s primary focus has been on Benelux countries, but the company is beginning to turn its attention to other opportunities across mainland Europe. “We have tended to enter a country in stages, first getting to know the people, understanding the companies and cultures, etc. It takes time to establish relationships. We’ll do it organically; typically we would begin with concept design work, then expand our services from there.”

Cork Plastics

Founded in 1969, Cork Plastics (CP) manufacturers a wide range of quality plastic products for the construction, building and agricultural sectors. Its main markets are Ireland and the UK, but the company is also rapidly expanding its European customer base, notably in France. CP’s sales and marketing director Seward Lynch says that identifying the right products for, and route to, each market has been crucial. “The hardest part was identifying potential customers, using similar products to those we produce in Cork,” he told The Market. CP chose France because it is large and the closest to Ireland after the UK, which is served by sister company FloPlast. “It has been a steep learning curve for us,” he confirms. “There are a lot of similarities, but a lot of differences, too. The French are slow to change, but there’s still potential there for us in the future.”

Freefoam Plastics

Another Cork-based company Freefoam Plastics began trading in 1990 and has grown into a multinational organisation, operating from sites in the UK, Belgium, France and Germany.

Freefoam entered the French market in 2002 with a trade offering of roofline and cladding products and expanded into the DIY sector at the beginning of 2009. For the last three years, the company has been selling a new cladding product developed specifically for the Dutch market and is developing plans for Germany. The continent now accounts for over 20 per cent of the group’s turnover.

“You need to find the right people to help you enter a new market and then integrate them into your organisation. You also have to find the right customers and distribution channels,” says managing director Aidan Harte. For Freefoam, innovation has been an essential core competency. “It’s important in new markets to adapt to meet the market’s needs, to find solutions that work there, rather than trying to force your existing solutions on them,” he emphasises.

Freefoam invests substantially in R&D, with support from Enterprise Ireland. “This allows us to grow our sales and stay ahead of our pan-European competitors,” Harte says. “Our end customers always expect us to come up with new products and innovations – anything that will help them get their work done more efficiently.”

Harte says that language is always something of a barrier, even though in Europe, in general, the command of English is very good. But Freefoam still sees real benefit in hiring people with multilingual skills that will suit its markets. “We have an inherent knowledge gap in language,” he says, “which is why we make sure we bring those skills into the company by direct hires.”

The Freefoam MD is also a strong advocate of doing homework on regulations and certification. Freefoam, for example, is the only maker of PVC cladding products with ATEC certification from the French building certification body, CTSB.

“It is very important for us to have a strong technical team, but you also have to be willing to tough it out to achieve the results you want,” Harte concludes. “It can take a lot of time and money, but it really is worth it.”

“You need to find the right people to help you enter a new market and then integrate them into your organisation.” Aidan Harte, managing director, Freefoam.

Second and third language skills key to European markets

One of the keys to getting traction in European markets is a sharp focus on the product or service, according to Stephen Hughes, head of construction markets at Enterprise Ireland. “As a rough rule of thumb, the further you are from home, the sharper your focus needs to be,” he says. “You need to be laser sharp in identifying the product areas or sectors in which you can make a major contribution. If you suggest you can do everything for everyone, you won’t be taken seriously.”

He also advises companies to be rigorous in their market research. “Too many companies don’t spend enough time getting to understand the dynamics of the market, the scale, the existing players and where their own offering might fit within that in order to be compelling,” he told The Market. “There is only one opportunity to make a first impression.”

Irish companies are doing well in the German and the Benelux construction markets, but all too often, they skip France and look further afield because of unjustified prejudices, he believes.

Tied up with overcoming this reticence – and getting to grips with European business culture in general – is the need for business leaders to embed second and third languages in their companies, he adds.

“Because English is so widely used as a common language for business in Europe, there is a sense that we don’t need to be able to converse in the language of a potential German or Belgian client. And even in companies that are able to speak to the client in their own language, there are surprisingly few with the in-house capability to really engage in the detailed business and technical side of things. After 40 years of being in the EU, we might have hoped for more.”

For Hughes, the language issue is all about demonstrating commitment. “Even if the customer has perfect English, it should be part of your culture to do business in the language of the country. Local hires can be a good starting point to demonstrate that level of commitment.”

This holds true even in construction, which may involve one-off contracts. “They may be one-off projects, but that does not necessarily imply one-off relationships, between contractors and sub contractors, for example,” he says.

Fuelling company growth AsiaPac

Fuelling your company’s growth in AsiaPac

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The size of Asia reflects the scale of the opportunity it presents to Irish businesses, delegates at Routes to Growth AsiaPac, a major conference held in Dublin’s Aviva Stadium, heard recently.

“Three of the four top economies of the world are in Asia. It accounts for half the world’s population and a growing middle class,” said Julie Sinnamon, chief executive of Enterprise Ireland, which organised the event.

“China, India and the ASEAN countries are showing more than double global growth rates, so they are not alone large markets but ones have massive growth within them. And ASEAN is one of the world’s largest economic zones, with a population greater than the EU and economic growth of double the EU’s.”

The AsiaPac region also includes Australia, remarkable for enjoying more than 25 years of continuous growth.

The region offers particular opportunities right now for Irish businesses in sectors such as aviation, financial services, international education and construction & engineering.

But there are challenges too.

“With Asia, you can’t go in, do a bit of business, and come home. You have to be really committed to the market. You need a balance sheet that can withstand the investment and you need an understanding of the culture,” she said.

There are logistical challenges related to distance, cost, lack of relationships and the need for a local presence. It’s not a homogenous block either. “Each of these countries has different culture that we need to recognise and appreciate. The Western mentality – believing we have the answer to your problem – doesn’t go down well in AsiaPac, you have to listen, and have patience.”

Be aware of distinct operational requirements in markets such as China, said MJ Guan, a partner at the China Ireland Growth Technology Fund.

It isn’t a question of simply translating your marketing materials but of doing first hand, on the ground market research for yourself. “Don’t just rely on third party agents,” he said.

Localisation requires much more than translation too, as companies such as Google and Uber have discovered. To assume that just because your business is successful in the Western world it will be successful in the AsiaPac region is a mistake.

Trip wires can include not finding out if you can get a direct licence to operate in your sector, and, if not, partnering with a local business. If you sell B2B get your “China Pricing” right. “In China we like to ask for a high discount from a vendor. If you don’t give a discount the customer may think you are not serious about the business,” he said.

Guan was at the event representing the second China Ireland Growth Technology Fund, which is newly launched. It aims to support Irish companies looking to access the Chinese market, as well as Chinese firms looking to use Ireland as a European base.

Announced in March 2018 by Ireland’s sovereign wealth fund, the Ireland Strategic Investment Fund (ISIF), and its Chinese equivalent, the CIC Capital Corporation (CIC Capital), the Euro 150 million fund is a successor to the now fully-invested China Ireland Technology Growth Fund launched in 2014.

That USD 100 million fund supported six Irish technology firms expanding into China, including Irish-founded Movidius, the global leader in machine vision technology that was subsequently acquired by Intel.

The new Fund will once again be co-managed by Dublin-based Atlantic Bridge and Beijing-based WestSummit Capital.

The sectors it is open to applications from are quite wide, said Elaine Coughlan, founding managing partner of Atlantic Bridge. They include agri-tech and med-tech, enterprise and consumer software, semi conductors and industry-4.0 “all the things China wants access to and wants to buy,” she said.

Even where a company is not ready for investment, the Fund can help applicants make contacts and start building crucial relationships.

“We look at thousands of companies on an annual basis and with a lot of them we say ‘You are not ready yet, here are some contacts, here are some relationships, do a little more work, a little more market research, and come back to us’” said Coughlan.

“It’s very rare we say ‘no, never’. We say ‘not now, come back to us’, and give them some pointers to think about in terms of execution. We’ve a portfolio now of companies – of CEOs, VPs (vice presidents) and BDs (business development executives) – who are in China and who can share that knowledge with other Irish companies.”

One company the Fund has already invested in is indoor positioning systems company Decawave, which currently has five people based in China.

“You need to get out there on the ground so use Enterprise Ireland and the Department of Foreign Affairs and all the resources open to you. There is always someone who can give you introductions,” said Paul Costigan, chief sales and marketing officer at Decawave.

Its technology is based around “really precise GPS that works indoors, with very many applications for robotics, drones, AI, automation and smart factories, all the areas that China is so far ahead in,” said Costigan. In fact, “China already accounts for 60% of our revenues and we haven’t even got going yet.”

Irish fintechs post-Brexit opportunity

Irish fintechs primed to shine with post-Brexit opportunity

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Giles O’Neill, Head of Fintech at Enterprise Ireland, explains why the sector’s thought leaders see a post-Brexit opportunity for young innovative Irish companies.

Chris Skinner, fintech and financial services expert, in Dublin to deliver the keynote speech for Enterprise Ireland’s Future of Fintech conference, said, “I talk about fintech being like a parent and a child, with the bank being the parent and fintech the child. Five years ago, everyone was talking about fintech being disruptive, out to get rid of banks. But five years later, the banks are still here.”

Skinner’s view of growing collaborations between disruptive start-ups and established banks was echoed by panellists, which included Elly Hardwick, head of innovation at Deutsche Bank, Kamlesh Thakur, chairman of Mumbai-based Prime Investrade and Stephen Moran, head of research and development at Bank of Ireland, at the conference attended by more than 100 leaders, disruptors and collaborators from international banking and fintech hubs including New York, Singapore and Sydney. Attendees of the event held at Dogpatch Labs in January also met Enterprise Ireland-backed companies to discuss partnership opportunities.

With opportunities emerging as attitudes towards the sector mature, a combination of established global leaders with significant Irish operations and innovative Irish companies positions the industry well for international growth. Ireland has become a globally-recognised centre for specialist International Financial Services, with 200 Enterprise Ireland-backed companies employing nearly 10,000 people across the sector at the end of 2017. Irish companies, from start-ups to scaling and large multinational companies, have achieved significant impact in international markets, exporting to 100 countries.

Companies offer innovative solutions and services across payments, regulatory technologies and broader fintech applications, an achievement supported by astute investments and an understanding of the market that allows them to meet the requirements of the toughest professional procurement, business teams and institutions in the world. For many Irish-based companies, disruption involves delivering a better, more convenient customer experience.

Irish fintechs to watch

“Legacy banks use the SWIFT network, which is slow and opaque, charges hefty ForEx fees, and fees both to send and receive money. We believe that is not fit for purpose,” said Gary Conroy, chief commercial officer of the Irish-headquartered international payments business, TransferMate.

Irish start-up Plynk targets millennials with a service that enables them “text” one another money. “For us, payments are social,” said Charles Dowd, Plynk’s CEO and co-founder. “With the phone, you phoned places. With a mobile, you call people. You don’t think about the systems. Mobile money will be the same. It’s not about payments, it’s about people.”

The point was echoed by Conroy of TransferMate in relation crypto currencies, “Cards, banks, the blockchain are just rails. How quickly I can get the payment from A to B is all people care about.”

In the regulatory space, the cost of governance, risk and compliance is estimated at 15% of the total cost of running a financial services firm. Technology can help deliver a better customer experience there too.

“RegTech is about the intelligent use of technology to get better outcomes for clients. It’s also about stopping regulations getting in the way of the user experience,” said John Byrne, CEO of regulatory risk intelligence firm Corlytics.

Brexit may be viewed nervously by some sectors but, for fintech, it promises to bring real opportunity, according to expert Chris Skinner, “US banks are actively relocating core European services to Ireland, I’m not just hearing that, I’m seeing it,” he said. “London is still seen as a global financial centre, but for access to Europe, with the assumption that London no longer has that access to Europe, the next best place for US banks is Ireland, and not just Dublin but along the West coast too.”

This confluence of favourable market circumstances internationally and a strong ecosystem at home, makes the future of fintech bright for Irish companies, particularly in the UK and North American markets, with Europe and Asia Pacific, also featuring strongly in last year’s export figures.

 

Enjoyed this article? Read more insightful fintech articles here.

This article was originally published in the Sunday Independent.

growth opportunities Asia Pacific region

Tap into growth opportunities in Asia Pacific region

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Delegates attending Routes to Growth Asia Pacific, a major conference organised by Enterprise Ireland in Dublin, were advised that to succeed they should make good use of two vital pieces of technology – their ears.

“Always listen,” said Dicky Yip, non-executive director of Chinese insurance giant PingAn and a former chief executive of HSBC China.

“It takes time to understand the cultural differences, even in terms of how to attend a meeting. Always try to think of the other party’s circumstances.”

It’s a fact former Aer Lingus CEO Dermot Mannion could relate to, thanks to his time as deputy chairman of Royal Brunei Airlines. “The biggest mistake I made was just 30 days in,” he told attendees.

“I took it on myself to make a presentation to the board with my initial impressions of what was wrong with the airline that we needed to put right. Frankly, there were some pretty harsh conclusions.”

When his twenty-minute presentation was complete, the room was silent. “There were no questions, no comments. So I walked away thinking, this is going to be easy, everybody is agreed about the harsh medicine we need to take.”

Not so. “The very next day I had an appointment with one of the directors and quizzed him a little bit about the reaction. It became clear that they didn’t like what they heard in the first five minutes and so shut down. Nobody listened to the points I made after that.”

Mannion had yet to deal with the cultural aspects of doing business in Asia Pacific. “I didn’t deal with the relational side. I hadn’t socialised the ideas in advance and I didn’t anticipate the cultural significance of the fact that people don’t like to say no. It’s viewed as disrespectful in meetings to do so. But worst of all, I didn’t go in there saying ‘Is this the right answer?’ I hadn’t even asked if it was the right question.”

The experience became an important lesson. “Surviving that, I went on to build the relationships, respect traditions and culture, and to ask the right questions. It was an early lesson and very valuable.”

Relationships are the foundation of business across the Asia Pacific region

Relationships are the foundation on which business is transacted across Asia Pacific. Taking the time to build them pays dividends.

“The hardest thing for Irish people to do is meet Japanese standards, which are very high,” said Martin Murray, executive director of the Asia Matters think tank.

“Japan works for high-end, high-service, high-tech products if you can meet Japanese standards but it is hard to do. It is very demanding. Every time you answer a question it provokes another nine questions. But if you can do that, business people in Japan will trust you, and if they trust you good things happen, and they introduce you to their networks. If you can satisfy a Japanese customer, you can satisfy anyone.”

Be prepared for the time it takes to get to that point, he cautioned, referring to the Japanese adage that “you sit on a cold stone for three years and eventually it becomes warm”.

“The Japanese don’t like people being pushy or engaging in a hard sell at the beginning. They have another saying too, ‘if a nail stands up you hammer it down’. But if they really trust you, you become friends for life. They are very loyal, very honest, and there are no issues with finance. But you have to have that personal relationship. It’s not just transactional.”

The Asia Pacific region offers particularly striking opportunities in aviation, delegates heard. “Ireland has emerged as one of the greatest global aviation hubs in recent times, with a significant development of aviation talent,” said Dermot Mannion.

Asia Pacific fastest-growing region for aviation

“All this is happening at a time when Asia Pacific is far and away the fastest-growing region for aviation. Over the next twenty years, the number of aircraft going into the Asia Pacific region will be equal to the combination of North America and Europe combined. We are very well-positioned to take advantage of that.”

Demand for ICT is growing too. “Countries and governments that invest in ICT are doing it to support economic development,” said David Harmon, vice president Global Public Affairs at Huawei Technologies in China. “Their plans have as their premise the need to develop technologies to modernise sectors across the length and breadth of their countries.” These sectors include health, education, agriculture, food, aviation, and travel.

Insurer PingAn is already on a path towards becoming a technology company, for example. “It’s not going to open branches but will use AI and technology to reach customers,” said Yip, pointing out that, as 99.99% of PingAn’s business is in China, SMEs that can work with PingAn overseas are “most welcome” at the insurer.

Equally, “State banks, which have massive market share, only started to think about technology ten years ago. Most Chinese banks are looking outwards for technical assistance,” he said.

China’s One Belt One Road infrastructure initiative is giving rise to opportunities in construction and engineering, he said, suggesting Hong Kong as a good route in. It both understands Chinese business culture and has been China’s conduit to the outside world for more than half a century, he said, making it “a good stepping stone for Irish business”.

The advent of new direct flights from Dublin to Hong Kong and Beijing will help. “Don’t underestimate the impact of having ‘Dublin’ on departure boards in Hong Kong is going to have,” said Mannion. “It will create a dynamic where companies in that part of the world will be interested, because it will be easier to do business here.”

Visit our markets section for insights on Singapore and China and the opportunities for Irish companies.

Set the SatNav for France: Irish businesses guide the way

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Desk research is important but sometimes the best way to find out about a market is to get stuck in, delegates at Ambition France, an Enterprise Ireland event were told recently.

The suggestion came from Shane Lyons, export marketer at Ei Electronics. He was speaking as part of a panel discussion on the theme of ‘Starting the Journey, from first customer to sustainable business’.

Today, Lyons has decades of experience in the French market but his first posting made a deep impression, taking place soon after leaving college and securing a position with an Irish agricultural engineering firm.

“Within a couple of weeks of getting the job I was in a field in the middle of France demonstrating farm machinery – with no experience of either farm machinery or of agriculture in France,” he said.

Get on the ground in France

“My philosophy since then is to get on the ground straight away, meet the customer, find out how they buy and what they are interested in. Then develop a solution that suits them,” he said.

“Get out there yourself. Use Enterprise Ireland, use their contacts, get to exhibitions and get a sense of where the market is going to go.”

Ei Electronics, originally a subsidiary of General Electric, was set up as a general components maker in 1963. By the time it was bought out by its management in 1988 it specialised in smoke alarms which it sold into the UK.

It made its first foray into France in 2004, a time when fire alarms were still unregulated and largely unknown. “People had no interest. The most common reply we got was ‘Je ne fume pas’, I don’t smoke,” he said.

Ei Electronics set about creating awareness of fire safety in the home through lobbying, “convincing firemen it wasn’t going to put them out of business,” and setting up an industry association that would help it access professional installers.

“That kind of work wasn’t creating sales so, in parallel, we went to Enterprise Ireland to identify all the buyers of different retail groups. By getting out and meeting them we generated around €1 million euro worth of business in retail channels, while at the same time developing the professional channels and trying to create a bigger overall market.”

There was an additional hurdle too, in that France had its own fire alarm standard, which took two years for Ei Electronics to secure.

The hard work paid off and is still paying dividends today, in so far as Ei Electronics is currently going through the same process in relation to carbon monoxide alarms.

Given that France has 30 million homes, compared with Ireland’s 1.5 million, the potential it offers is enormous. “There are 400,000 new homes being built every year in France and Macron is pushing through legislation to speed up their construction. That will benefit Ei Electronics and everybody in this sector,” he said.

Choose the right channel to market

Because Ei Electronics started off selling to DIY retailers, when its real target was the professional installer, it had to create different channels to market, pricing and communications strategies.

“From day one we had to employ a public relations company to hone our message to each of these channels. That’s a step I’d recommend to anyone looking to get into this market, to help you translate your documentation and your brochures,” he said.

An ability to build and maintain relationships is key to success in France, added Clem Garvey, director and chief financial officer of Escher Group Holdings.

“In France’s culture, you create a customer relationship. You do not get the business solely on the basis of having the best price or the best product but also by having a relationship forged over many years.”

Garvey has extensive experience of winning major public and private tenders in France. “It’s a massive market,” he said, pointing to 36,000 companies in France with revenues of between Euro 10m and Euro 500,000m. “There are more HQs of Fortune 500 companies in Paris than in London or New York,” he said.

This represents a massive opportunity for Irish businesses.  “But because it’s big, it requires multi-channel distribution. You will not achieve all your objectives simply by going with one channel over time. You’ve got to have your fingers across the country through different areas. And, regionally, you will not necessarily sell using the same people in, say, the Alsace region as you will in La Rochelle.”

Winning major accounts in France requires a layered approach, consisting of “some degree of direct presence, a network of distributors or wholesalers, and ultimately some form of web or phone selling for very low spend customers,” he said.

“Yes you will have channel conflict but if you don’t have channel conflict, you’re not trying hard enough,” he said.

Margins can be tight but revenues can be grown by adding additional, billable, services outside of the tender terms.

Irish firms can have an advantage when it comes to bundling, especially if it involves the intervention of personnel, because employers’ social charges in Ireland are a fraction of what they are in France, he pointed out.

But if you don’t have a direct relationship with a client, “integrate your offer with someone else who does,” he said.

“Look around to see who has a direct relationship and see how you can integrate your offer with theirs. Joint ventures can be a great way to start.”

Tips for Success in Germany

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Caroline Kelly, sales director at Burnside Autocyl, shares her top pieces of advice for Irish companies keen to tap into the German market.

• Be confident about your product or service before going into the market. We have always been focused on the parameters of our product offering – we make hydraulic cylinders with a bore diameter of 32mm up to 200mm and up to eight metres in length. We offer a wide range of products, but it is still finite at the same time. Get feedback from market experts and existing players in Germany on your product – Enterprise Ireland can help to arrange this.

• You need to convince potential customers in Germany of the three C’s – i.e. that you are capable, competent and committed – and able to interface with them on all levels. Many companies are good at selling, but not so many are good at both selling and supporting clients on a technical level. After-sales service is hugely important as you are looking at a relationship that goes on for years – in our case for the lifespan of the machine incorporating our hydraulic cylinders.

• When you are lucky enough to win German customers, mind them like gemstones. They are hard to win so you don’t want to do anything to lose them. Bad news travels faster than good, so try to exceed what they might expect from suppliers on their own doorstep. Be as good, if not better, than local suppliers in terms of quality and consistency of service.

Learn more about doing business in the Eurozone with the support of Enterprise Ireland.

Knowledge Transfer Ireland

Research shows that Knowledge Transfers to the bottom line

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Alison Campbell, Director, KTI Knowledge Transfer Ireland, outlines what small and medium Irish companies stand to gain from connecting with Ireland’s rich research ecosystem.

Busy Irish SMEs can sometimes see research and development as a nice to do, rather than activities that can heavily influence business results. If a company has not previously been involved in knowledge transfer, they can at times view higher-education institutes as removed from the competitive reality of driving business.

Results from Enterprise Ireland’s most recent client survey show that companies that collaborate with the Irish research system on market-led projects report more than double the sales and exports than those that don’t. Knowledge transfer delivers many additional benefits, including a closer understanding of industry challenges within academia, new entrepreneurial activity, higher business activity, and new jobs. These compelling benefits show why Irish SMEs should invest in research and development and take advantage of supports available to help them do so.

Supported by Enterprise Ireland and the Irish Universities Association, Knowledge Transfer Ireland helps companies to benefit from access to expertise and technology, by making it simple to connect and engage with the domestic research base.

A review of the performance of the Irish Technology Transfer System published by Enterprise Ireland in December showed that strong performance and a high level of impact has been achieved in the commercialisation of research over the last four years. The Annual Knowledge Transfer Survey (AKTS) published by KTI reports that an impressive 109 spin-out companies from research institutions are active in Ireland many years after their initial formation. Spin-out companies currently employ over 980 people. 99% of active spin-outs are based in Ireland, with many having a global footprint. 24 new products and services were brought to market based on ideas and technology from state-funded research.  

The Herschel is a robot arm IR sensor technology, developed in a research collaboration between the School of Engineering at TCD and Ceramicx Ireland, a spin-out company that supplies industrial heating technologies to support manufacturing processes. Frank Wilson, Managing Director at Ceramicx, describes his experience, “For me, knowledge transfer works best as advanced common sense. An organisation like Knowledge Transfer Ireland helps SMEs to connect with a world of academic expertise and institutions they might otherwise find difficult to access. They help you answer questions like ‘Who do you engage with?’ KTI can help your company focus on what your specific project needs. You might want to implement a product process that no other company is using yet. The expertise of academic specialists can help realise those plans. At Ceramicx, we’re working on two important knowledge transfer projects at the moment. But everything depends on the specific circumstances of the company.”

For company’s eager to explore what knowledge transfer could do for them, KTI’s interactive “Find R&D Funding” tool provides a mechanism that helps them to find the most appropriate funding and supports for research and development activity in Ireland.

Enterprise Ireland recently approved the third phase of its Technology Transfer Strengthening Initiative, a €34.5m investment to be made over five years that will help sustain capacity within the Technology Transfer Offices to ensure continuing effective commercialisation of research and to maintain the bridge between the research organisations, businesses and entrepreneurs.

The number and range of supports on offer by the Irish state to support enterprise innovation directly and indirectly are critical to driving increased levels of innovation in Ireland.

Ireland now ranks tenth in the world in the Global Innovation Index 2017 and has been cited as the most R&D effective country in the EU, achieving maximum innovation output per euro of public funding.

With a skilled technology transfer resource in the publicly-funded research sector and an active innovation system, we can further KTI’s work to make research collaboration and commercialisation simple and accessible.

This article was originally published in the Sunday Independent.

Data centre Irish companies Sweden nordics

Data centre surge connects Irish companies to Sweden

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Karin Angus, senior market adviser based in Enterprise Ireland’s Stockholm office, explains how Irish companies can power the Nordics’ expanding data centre construction sector.

With the estimation that, by 2021, 95% of data centre traffic will come from the cloud, compared with 88% today, a projected increase in demand is promising for Irish high-tech construction and engineering companies, who are already partnering in the development of the most innovative and large-scale data centres in Sweden today.

Major Swedish projects driven by Irish construction and engineering companies include the Digiplex facility in Upplands Väsby, and three Amazon Web Services facilities in Katrineholm, Eskilstuna and Västerås.

In March, Enterprise Ireland held a seminar on the construction sector at the World Trade Center in Stockholm, at which forty Irish and Swedish companies participated. Attendees received presentations from Thomas O’Connor, Director of Irish company Collen Construction, and representatives from Business Sweden, the Swedish Construction Federation, the Swedish Transport Administration, the Swedish Association of Public Housing Companies, Enterprise Ireland, and from the 16 Irish companies that attended. Ireland’s ambassador to Sweden, Dympna Hayes, and Ireland’s Minister for Culture, Josepha Madigan, also attended.

Ireland’s geographic location, on the western edge of the Atlantic, has helped it to become one of the most important hubs for global technology giants, including Microsoft, Amazon, Google, Dell EMC, IBM, HP, Facebook, Equinix, InterXion, and Digital Realty.

Speaker Tomas Sokolnicki from Business Sweden discussed why construction in the Nordics has accelerated since Google opened a data centre in Finnish Hamina in 2009. Sweden’s cool climate reduces the energy required to cool down data centres, one reason why it ranks as the third most suitable country in the world in which to locate them. A stable electricity supply, enabled by a production mix of hydro and nuclear power, also makes it a favourable location for data centre construction.

Two Irish companies, Hanley Energy and Kirby Engineering, announced the expansion of operations in Sweden at the seminar, having recently won a number of significant new projects.

Power management specialist Hanley Energy plays a key role in protecting data centres from problems caused by power supply issues and will open an office in Torshälla in Sweden.

Edward Pepper, Head of Operations at Hanley Energy, said, “Sweden is an important market for data centre building. An establishment in the Swedish market, together with our new office, not only supports our growth plans, but also shows our commitment to our customers who expect support around the clock for 365 days a year. Customer demand is central to us, and our expansion in Sweden is part of the implementation of our vision, Global Competence Center.”

With a turnover of €165m, Kirby was founded in 1964, and currently directly employs over 700 highly-skilled professionals.

Commenting on the expansion into Sweden, Dave McNamara Associate Director for Kirby in Europe said, “Although Kirby is relatively new to Sweden, we are positive about our growth and success in the market. This positive outlook is backed by our success so far in securing a number of high-profile projects, with more projects in the pipeline. Expanding our operations further in the Nordics region is a progressive step for the company both from a strategic and development standpoint, especially given the growth in the mechanical, electrical, and plumbing construction sector.”

For Irish construction companies interested in opportunities in the Nordics, it is important to be familiar with local labour laws, follow union regulations, and listen to local advice. Take the opportunity to explore market intelligence and potential introductions with Enterprise Ireland. Staff in the region will assist you with local knowledge and contacts.

Enterprise Ireland recently published the Future Data Centre white paper, in collaboration with Data Center Dynamics, analysing major changes that will impact design and construction trends over the next five years. The white paper can be downloaded from the Irish Advantage website and offers a snapshot of the data centre construction landscape, major changes impacting design and build processes, regulatory and technological drivers of change, and strategies for smart design and construction.

This article was originally published in the Sunday Independent.

Irish CEOs Asia Pacific

Stories from the road – Irish CEOs in Asia Pacific

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Winning business in AsiaPac is a marathon, not a sprint, for Irish fintech company Fenergo.

“We’re asking banks for between €30 million and €50 million, so these are big ticket deals. You don’t just walk up and ask for that kind of money. For us, closing deals is the equivalent of running a marathon, in that there are 26 units of work to be done, and it takes us between nine and 12 months to complete,” explained Marc Murphy, CEO of Fenergo.

He was speaking onstage at Routes to Growth Asia Pacific, a major conference organised by Enterprise Ireland at Dublin’s Aviva Stadium.

Even in a fast-paced sector like fintech, don’t expect speedy results, he cautioned. “For all we talk of digital revolutions, it’s still a pedestrian pace for big institutions. To get people to put their career on the line to back you is a big, elongated process. It’s about old-fashioned feet on the street. They want to see roots, they want to see you hiring locally, putting investment and commitment in.”

Asia currently represents 35% of Fenergo’s business. “Our beachhead in the region was Australia,” he explained. “We now have five of the largest Australian banks. From there we went after Singapore, we now have three of four local domestic banks there. We also have a presence in Tokyo, and in the next quarter we will have signed three of the large five Japanese banks.”

One of the ways Fenergo made inroads into China was via the overseas branches of banks such as Bank of China and ICBC, “they are giving us the opportunity to go into mainland China,” he said.

Certain steps can help your progress, such as using the Irish embassy for a launch, as Fenergo did in Singapore. Making key industry hires who are known locally is also helpful.

The company currently employs 90 people across AsiaPac, and has invested around €7 million in the region.

“The basics that we do in London and New York, we will do in Singapore and Tokyo too. There might be cultural differences, such as, in Tokyo, the C-Suite will only talk to the C-Suite, so you find out the customs of each society, but the principles of how we do business are no different whether it’s Toronto or Singapore.”

CAE Parc Aviation

CAE Parc Aviation first began doing business in the region almost three decades ago, said chief executive, Frank Collins. Today, 45% of its worldwide business comes from Asian companies. Moreover, 25% of its business is with Irish companies whose own customers are in Asia. All in all, “it’s a massive market for us,” he said. Parc now has seven offices spread across five AsiaPac countries.

Opening its first office in Tokyo, in 2006, proved pivotal, enabling it to develop deeper relationships. It now has three offices in China and employs 15 people in the region in total.

“Our experience was that though we found we could grow really fast – because of the growth in aviation – the hard part would have been to deliver. So we hauled back and decided to concentrate on three or four of the main airlines there and deliver a really satisfying product.”

Expansion can bring constraints for any company. “For us cash flow has not really been an issue. Our experience has been excellent in terms of getting paid,” said Collins.

“For us, it was just the length of time it took, and the regulation involved, in supplying pilots. Between the time you find a pilot and the time you have them fly, it can be months in certain Asian countries, so you’ve got to be prepared to have people on the ground, working through that, before you earn a penny. That’s the real investment, time and resources. But if you are not prepared to put in the time, and the people on the ground, don’t bother, you just won’t win.”

Cubic Telecom

Barry Napier, CEO of Cubic Telecom, first discussed the possibility of entering the region with Enterprise Ireland in 2010. Its initial market was Hong Kong, followed by Australia and New Zealand, Singapore and Japan.

Cubic Telecom also benefited from Irish embassies in the region. “Regulation is very different in every market. A key thing we leveraged from Enterprise Ireland was an introduction to the local ambassadors. They know about the laws and the regulations, and how to work within the community. It’s about networking, use that abroad,” said Napier.

Douglas Proctor is Director of UCD’s International office. The university currently has 5,000 students from the region studying at its campus, plus a further 5,000 studying in partnership arrangements in countries such as China, Singapore, Hong Kong, Sri Lanka, and Malaysia. “One of the key things universities can offer is to act as a broker for Irish industry in terms of partnerships and R&D in the region,” he said.

UCD has around 20,000 alumni living and working in the region, which “if you map that across the seven universities in the country, means there are Irish people trained and working and ready to support your export aspirations in the region,” he said.

Thinking of the market in terms of clusters, rather than geographies, helped Fenergo tackled what is a vast region.

“In our market, banks all move together. We have all the Australian banks, for example, and we get them together, which can take two or three years,” said Mark Murphy.

“Divide your market into sub-segments and go after them like they are clusters. Put every resource you can against one of those sub-segments – call it a beachhead in terms of how you tackle them – and overwhelm them with customer service. Overwhelm them with delivery. Make them feel like you are bigger and better than Apple and Microsoft, and all the other big brands out there.”

“That has been our real formula for success as we’ve gone after new markets and it has proven to be our success in Asia too.”